Reblogged from Quartz:

NYC natural gas pizza truck

New York City Mayor Mike Bloomberg almost burned the roof of his mouth on a steaming slice of pizza from a food truck this week. I was among the reporters in attendance who yelled for him to wait for it to cool.

It’s hard not to care about Mayor Mike. He’s been a terrific mayor. But, like everyone else in politics, he’s complicated, and far from perfect. Beloved by environmentalists since he gave the Sierra Club $50 million for its anti-coal campaign a couple of years ago, he’s also a fan of natural gas.
Oil tycoon T. Boone Pickens was with the mayor last Thursday at the press event to show off the city’s first natural gas-fueled food truck. A Pickens’ company helped pay for the truck as part of a big corporate gamble on natural gas pumping stations and trucking deals.
Side-by-side, Pickens and the mayor made their case for U.S.-sourced natural gas, and fracking in New York State in particular. New York Governor Andrew Cuomo makes that call, and has been mum lately on the topic as he “studies it further.”
Before Cuomo imposed a moratorium on the decision, Albany bookmakers had him pegged for a “yes” on fracking because there aren’t that many ways for him to create upstate jobs. But that was before the anti-fracking movement in the state really gathered speed.
Market conditions are making it easier for Cuomo to delay a decision. Natural gas companies aren’t pushing as hard in New York as they might, say industry insiders, because of oversupply and easier plays in Texas, Oklahoma, Kansas and Ohio.
Someday Cuomo will have to choose though, and when he does, will he listen to Bloomberg?

Thursday, February 21, 2013 3:51 PM ET
New York should start fracking, say T. Boone Pickens, Michael Bloomberg
By Abby Gruen

New York City Mayor Michael Bloomberg and energy tycoon T. Boone Pickens met over pizza in New York City on Feb. 21 at a news conference featuring the city’s first natural gas-fueled food truck, where they also discussed New York state’s policies on hydraulic fracturing.

Pickens, active in the hedge fund BP Capital Management LP, founded Pickens Fuel Corp., which preceded Clean Energy Fuels Corp., a partner in the development of the pilot compressed-natural-gas-powered food truck with New York City-based Neapolitan Express. Bloomberg, a staunch proponent of natural gas as a clean energy source, said the city is expanding its use in its municipal fleet.

“I have supported smart new regulations to support the city tapping into the nation’s supply of natural gas safely and responsibly,” Bloomberg said. “Now, thanks to a better supply and better infrastructure, compressed natural gas is finally becoming a viable alternative for vehicles like this food truck.”

Highlighting the city’s efforts to reduce air pollution and greenhouse gases by greening its fleet of vehicles, which includes a new campaign to support electric vehicle conversions, Bloomberg, who gave $50 million to the Sierra Club’s anti-coal campaign in 2011, also spoke out strongly in favor of shale gas drilling in the state.

“It is up to the governor, but I personally have said we should be fracking, not in the watershed, but we should be fracking. … About 13,000 people get killed every year by the pollutants from coal-fired plants. … [Also, as] Boone alluded to, getting oil from outside this country is expensive and it transfers our wealth to people who are trying to destroy our lives. … Of all the things we can do, natural gas isn’t perfect, but it certainly looks like it can make this country energy-independent and reduce dramatically the pollutants going into the air,” Bloomberg said.

“Does it have some risks? Everything has some risks, but unless you are willing to give up electricity, and give up automobiles and trucks and airplanes and go back to living in a cave, you’re going to have to get it from someplace. This is the best of all of the alternatives, and I would hope that the governor would come to that conclusion,” he said.

Pickens’ response was, “Mayor, if you were in Washington today, we’d be a hell of a lot better off than we are today.” A former geologist and engineer, Pickens said he has “never struggled with any damage done from any frack job,” going back to 1952.

“The governor said that he was not going to approve fracking until he’s comfortable that fracking is not going to damage anything,” Pickens said. “If I was the governor and didn’t understand fracking, I’d say the same thing he did. … But you should look around the United States. There have been over 800,000 wells fracked in Oklahoma, Kansas and Texas, and there has been no evidence of anything being damaged. I think when the governor looks at everything, he will decide for fracking.”

New York City operates three CNG stations to fuel 128 city vehicles for the New York City Department of Parks and the Department of Sanitation, Bloomberg said. The city is also planning pilots of high-speed curbside electric vehicle charging stations, as well as working on a plan for 10,000 EV parking spots.

Clean Energy Fuels has a number of CNG stations in the New York metropolitan area, part of its 62-station portfolio, which is expected to double in 2013. In addition, Clean Energy Fuels has 70 new liquefied natural gas truck fuel stations on highways, with 70 more planned for 2013 part of its plan to create a cross-country network of LNG stations 250 miles apart, Clean Energy Fuels Senior Vice President Peter Grace told SNL Energy.

“If we get on to the resources [of the U.S.] and off of OPEC oil, and get on the mayor’s plan [for] electric cars, natural gas and [using] our resources, this country would be way, way ahead of where we are today,” Pickens said.

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I work down on Wall Street where the lingering effects of Superstorm Sandy are the dozens of vacant buildings still being rehabbed from flooding. Those blackened windows don’t just mean displaced workers, they mean lost jobs and businesses.

A born and bred New Yorker, I love this island. After September 11 I felt the threat of terrorism for the first time. After Sandy, I see the threat of rising sea levels in my city. While the nation can’t seem to agree on the cause of climate change, since Sandy, one thing we all seem to agree on is that extreme weather events are increasing.

I deal with my concern about climate change in my work. I look for stories about wind developers, solar financiers and clean tech entrepreneurs; as well as about the companies making and financing conventional energy. I often wonder why more people on Wall Street don’t worry about the same things as me: why aren’t we all fighting for a clean energy future for our country and children?

One company that has taken on that challenge, unlike any other, is Google. If you look at the annual reports of many, many large corporations, the word “sustainability” is everywhere. Companies are lowering their carbon footprint in how they manufacture and transport their goods, and bragging about it to their shareholders. But Google has gone much farther than anyone else, and seems to have done it under the radar.

Google has spent over $1 billion on clean energy. They own wind farms and solar farms. They invest in carbon offsets; new clean tech companies and businesses that are coming up with new ways to fund clean energy. They pay for expensive clean energy lobbying in Washington, and continually increase the efficiency of their server farms.

A few years ago, when I first started covering energy, I heard Google’s leader for climate and energy initiatives, Dan Reicher, give a terrific speech at a Wall Street clean energy event. He has since moved on to Stanford University, and has become a powerful advocate in Washington pushing to change the tax laws for more parity between clean energy and fossil fuel companies.

Last year Google hired another brilliant, and politically connected, powerhouse, Arun Majumdar, to lead their energy effort. Majumdar most recently was the director of the Advanced Research Projects Agency-Energy, or ARPA-E, an incubator for new energy technologies at the U.S. Department of Energy.

Sometimes mocked for their simple declaration of “don’t be evil” by advertisers who can’t get their names to appear on the first search page, Google is being very, very good about energy. Unafraid to attack the energy industry status quo, the engineers in Mountainview are making a tremendous, measurable difference in stimulating a clean energy economy in the U.S. Why aren’t other companies following their lead?

Maple Ridge Wind Farm

Lowville, New York is one of those striking places that hark back to long ago times when the world was simpler and made more sense. I got to go there this summer to tour a massive wind farm, the largest on the Eastern Seaboard when it was built six years ago.

Perched on a ridge between Lake Ontario and the Adirondacks, it is an idyllic agricultural haven, the dairy capital of the state, where Amish buggies slow traffic. The turbines, each as tall as the Statue of Liberty, run for miles, scattered on century old farms, oblivious to the battles in Washington over their role in America’s energy stack.

The future of U.S. wind energy is being hotly debated in this election cycle because it has been fostered off and on over the past decade by a federal tax incentive, called the production tax credit, or PTC. Doom and gloom is predicted if the PTC is not renewed at the end of this year. But the wind farm in Lowville belies that claim. It was funded and built at a time when the PTC had expired. Instead, New York State incentives, passed under Republican Gov. George Pataki, made it possible.

States passing renewable portfolio standards in the past five years have fostered renewable energy growth in the U.S. as much, if not more, than federal incentives. The loss of federal incentives, which include the investment tax credit used by the solar industry, set to expire in four years, will not mean the end of renewable energy projects in some states.

Helped by plummeting equipment prices and state renewable portfolio standards, according to Bloomberg New Energy Finance, the average wind project will reach grid parity, putting it on a par with fossil fuel energy, in 2016, and according to GTM Research, solar projects in New York, Hawaii and Arizona will be competitive without federal subsidies.

But if the US government pushes down all the responsibility for promoting clean energy to the states, how much can the states ask their residents to pay to support renewables? That’s the question the president and Congress need to answer.

Here’s my article for SNL that looks back at the development of the remarkable Maple Ridge Wind Farm.

Maple Ridge Farm from greenfield development to Chinese investors

Watching President Obama sign the Jumpstart our Business Start-ups Act into law last week brought to mind a company I have followed since they filed a prospectus with the SEC to go public last year.  The night before its shares were to begin trading on the NASDAQ, a week after the president signed the law, BrightSource Energy cancelled the offering due to “adverse market conditions.”

BrightSource Energy Inc.’s decision to pull their initial public offering the night before its shares were to begin trading on the NASDAQ was a blow for the Oakland, Calif.-based solar thermal company and for the renewable energy industry.

Hurt by a double whammy of weak solar photovoltaic prices and natural gas trading below $2 per million British thermal units, the roughly $182 million stock offering, relaunched in March after being shelved for almost a year, was closely watched by both wind and solar companies as a bellwether for the health of their industry. Its failure raises concerns about the financial markets’ view of clean energy.

“It certainly has a negative impact. It is a blow for solar IPOs, and a disappointment to the clean tech sector,” said Sheeraz Haji, CEO of Cleantech Group, a research and advisory firm based in San Francisco.

BrightSource, the most established solar thermal company in the U.S., with investors that include Google Inc., NRG Energy Inc., Alstom Power Inc., Morgan Stanley and a handful of top venture capital firms, shelved its IPO plans in 2011 as the solar industry struggled with falling PV prices and negative headlines from the Solyndra Inc. bankruptcy.

With work on the marquee 392-MW Ivanpah solar thermal project it jointly owns with NRG and Google in California’s Mojave Desert more than 25% complete, the thermal solar developer/manufacturer dusted off its offering plan March 21 and kicked off its road show to sign up new equity investors.

Unfortunately for BrightSource, a rash of high-profile solar company bankruptcy filings, including one April 2 by its closest U.S. competitor, Solar Trust of America LLC, didn’t help it fill its order book in the run-up to its public offering.

“The bet BrightSource was making was that while there was negativity in the solar space, they had 13 power purchase agreements from Pacific Gas and Electric Co. and Southern California Edison Co., and they thought they could break through the [bad headlines] and explain the difference in their business and how they have real revenues, real contracted bookings for their power purchase agreements,” Haji said.

Perhaps most important, historically low natural gas prices overshadowed the IPO process for BrightSource and dampened investor interest in the solar sector, Haji said.

A lack of familiarity with concentrating solar power’s technology also hurt the offering. In March, BrightSource joined forces with solar thermal developers Abengoa Solar Inc. and Torresol Energy to promote concentrating solar power, a recognition that their technology is not well understood.

“Solar thermal is really different from PV, but I don’t think Wall Street gets that, and tends to lump them together,” said Tom Konrad, a clean energy portfolio manager, and blogger at AltEnergyStocks.com.

Unfortunately, solar stocks have underperformed the market for a couple of years and have done particularly poorly in 2012.

“Valuations are bad, and [companies] don’t go public when valuations are bad,” Konrad said. “In the past month solar stocks have fallen 13%.”

Investors are beginning to recognize the value of renewable energy production, though, and the value of a long-term power purchase agreement from an investment-grade utility, Konrad said.

“I think Wall Street will get its head around it, especially since parts of the debt market have,” Konrad said. “The strongest evidence is when you see [Warren] Buffett buying. His [MidAmerican Energy Holdings Co.] keeps buying solar and wind farms … and Buffett is all about buying things at less than their future income stream.”

MidAmerican, which owns more wind-powered capacity than any other regulated utility, invested several billion dollars in solar at the end of 2011.

“Because valuations are so bad now, we see people like Buffett coming in,” Konrad said. “People follow Buffett. It is dead certain that at some point this will become a boring asset class, and everyone will have a lot of money in it. It will be [considered] infrastructure, like a toll road.”

Until then, or at least for the immediate future, BrightSource will need to find another way to raise equity capital besides the public markets.

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Upstate New York towns that host power plants are getting socked by fallout from the same low natural gas prices that are hurting savvy investors like Warren Buffett and Carl Icahn.

When the price of natural gas goes down, the price of electricity goes down. But power companies still have the same fixed expenses.

The speed of the dislocation caused by the 2010 American natural gas revolution is likely to cost Warren Buffett $2 billion on a failing Texas utility. Carl Icahn,  invested in another utility, Dynegy, last year, that is fighting for its life in bankruptcy court in Poughkeepsie, N.Y. now.

The fate of Carl Icahn’s Dynegy investment is linked to that of the 2,000 students in the Marlboro Central School District, in Newburgh, New York.  Two power plants in town pay their school taxes.

Icahn and company would like to ditch the Roseton and Danskammer plants there because they don’t make enough money to pay down the debt Dynegy piled on them when they bought them. New U.S. enforcement of the Clean Air Rules also make these older plants more expensive to operate. The plants are worth their salvage value only to investors at this point.

I spoke to the superintendent of the Marlboro Central School District a couple of weeks ago about the power plants.  He said they pay  $14M of a $39M tax levy for the schools. If they close it will be a “crippling blow” to the school, one he hopes will be made up by the county.

Dunkirk City School District outside of Buffalo, N.Y. is also facing the loss of significant tax revenue because low natural gas prices are forcing NRG Energy to try to mothball their coal-burning Dunkirk power plant there.

When I was an intern at The New York Times I wrote about the impact of a power plant tax snafu on a small town, Haverstraw, N.Y.,  that was ultimately settled in court, but wreaked havoc on school budgets and property taxes.

It’s part of the Faustian bargain communities make to have a power plant in their borders. Locals are willing to overlook smokestacks and pollution for the jobs and tax revenues.

Now that the revenue is going away, and the schools are strapped, you can’t exactly blame Dunkirk, Newburgh or Haverstraw for long-term bets on power plants, they were in good company with Buffett’s Berkshire Hathaway and Icahn Associates.

A lack of carbon legislation, and waning support for green energy on Capital Hill, has created strange bedfellows in the energy development world. The U.N. and the Sierra Club recently reached out to clean tech business leaders, some of whom are red state Republicans, who don’t believe in man-made climate change, to form strategic partnerships.

David Crane, CEO of NRG Energy, one of the country’s larger merchant power companies, got top billing with Michael Brune, executive director of the Sierra Club and Robert Orr, assistant secretary-general for climate change at the United Nations at a Wall Street clean tech conference sponsored by the investment firm Jefferies at the end of February in New York City.

All three agreed on one thing, if the world is going to move towards a sustainable, clean energy economy, the private sector is going to lead the way, with or without government support.

“The bad old days where the business community eyes the UN with suspicion and the UN eyes the business community with suspicion are over,” said Orr. “The fact is, on a wide range of issues both through the global compact over the past decade, and the way the UN is doing business, there is not only space for the private sector and for partnership with the UN and the private sector, but much more than space there is active encouragement and an open hand.”

Crane, whose company owns close to 26,000 megawatts of conventional power plants — coal, gas and nuclear, in 14 states — said that in 20 years NRG’s fuel mix will be just natural gas and renewables.  For the past couple of years, his vision has been to turn NRG into the Whole Foods of utilities, leveraging shifts in consumer behavior.

“Almost all Americans will do the right thing environmentally if given the choice between the right thing and the wrong thing, but it is really only a secondary or tertiary consideration,” said Crane. “You have to offer them an experience, a value proposition that wins on the merits, and then as they say down in Louisiana, the environmental part is the lagniappe on top of the proposition.”

Brune aligned the clean tech industry’s interests with the Sierra Club’s. To get the same kind of tax and regulatory breaks for wind and solar that the fossil fuel industry gets is going to be a battle, said Brune.

“It is not an economic argument that will win the day,”said Brune. “Economics are important, technology is vital, removing market barriers is critical to the success of this work, but there is also a more naked, raw political element that is essential to this campaign. If we are going to be successful, and if we as a country are really going to move away from dirty energy, we have to realize that it is an ugly and challenging political fight to do so.”

Con Edison arguably has the best electrical delivery system in the world. But superlatives don’t always translate to profits.

As a proud New Yorker, I’m the first to admit we are tough markers, and for Con Ed, which operates like many utilities in a weird public/private role, that means it can never be good enough.

After New York deregulated it’s power companies a decade ago, Consolidated Edison, Inc. became an investor-owned utility answering to its stockholders, while its subsidiary utility company, Consolidated Edison of New York, Inc., continued to provide power transmission and distribution under state and federal regulatory oversight. The regulators monitor the utility’s performance, and use that data to assign investor returns.

To keep the city and the state happy, Con Ed has the best record in the country for delivering power without interruption. Most electric customers outside the New Yorker metropolitan area can expect over an hour of outages a year. In New York they have an average of 20 minutes. And when bad things happen, like ice and snow, power is restored faster here too.

In my ongoing project of writing about all facets of New York’s power infrastructure for SNL Financial, I found out more than you probably ever wanted to know about Con Edison, and how the bar for its performance gets raised higher and higher.

Here’s a copy of my article for the curious. Cheers!

Indian Point evacuation zones

New York State Gov. Andrew Cuomo wants to close down Indian Point, a nuclear power plant in Westchester County, just north of New York City.

Cuomo is worried that if, God forbid, there were an  accident or problem at the plant, there is no way the 17  million people in the 50-mile evacuation zone could leave, or protect themselves.

Fukushima is about 150  miles from Tokyo, but Indian Point is only 35 miles from NYC, and the fast moving Hudson River flows south from the plant to the city.

It’s hard to fathom the harm a Fukushima-level disaster at Indian Point would have on NYC, and the entire US economy.

How safe can Indian Point be? Like other US nuclear facilities, its personnel drill endlessly on two-foot thick manuals, and simulated control rooms. But gaskets still blow, engines overheat, water leaks and humans make mistakes. And even the best training cannot overcome the design flaws in the 40-year-old buildings.

When I toured the plant recently, I was surprised to see that the  highly radioactive spent fuel pool is located in the equivalent of a Quonset hut, not under the reinforced cement containment dome that covers the nuclear reactor.

I asked a nuclear engineer, David Lochbaum, of the Union of Concerned Scientists why this fuel is stored in such a vulnerable structure.

This is his reply:

When Indian Point and other plants were designed, spent fuel was expected to remain on site for only a few months before being shipped offsite for reprocessing. Consequently, spent fuel storage was deemed a temporary measure not warranting the protection reserved for permanent hazards. Also, a loss of water inventory or a sustained loss of cooling that allows the pool’s water to boil away was not considered credible, so there’s no design measures to mitigate it. The only postulated accident involving the spent fuel pool was an irradiated fuel assembly being dropped while in transit in the pool. The dropped assembly strikes fuel assemblies stored in the racks below damaging some fuel rods.

Because loss of water inventory events are deemed impossible, the building housing the spent fuel pool is designed for external threats (high winds, snow accumulation on its roof, etc.) and not the hazard from vapor and hydrogen emitted from a spent fuel pool in distress. This narrow focus resulted in the buildings around the spent fuel pools being designed to basic industrial codes similar to those used to design Wal-Marts rather than the more stringent nuclear codes.

I wrote an article for SNL about Indian Point after my tour that discussed what the plant owner, Entergy, is doing to keep the plant open.

Here it is: Entergy, appealing NY decision, offers look at Indian Point